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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (15734)	3/22/2007 2:56:10 AM
From: elmatador	Respond to of 219836

With that I agree totally. The risk is the perception that there's no risk. But this -perception of no risk-situation is fabricated. And that was the same situation the borrowers of petrodollars in the late 70's faced. Why subprime was financed on the fly without much need for documentation? As people informed us in the postings below? Because if the guy had to bring a stack of documents, seat in front of a bank clerk evaluating his risk, this guy's brain will start thinkiing: Can I really do that? What if that happen? Wouldn't be better if I ask some more questions around before I sign if for that? What is the option of not doing that? How big the fight I'll pick a with my wife if I back off? The guys lending the money knows that the potential borrowers would think that way and they don't want to make that potential borrowers to start thinking. At a certain point in time money will once again become real. Like I said: you cannot destroy capital. At a certain point capital that's being destroyed has to become real once again. How it is going to be real once again? bail out? securitization? But you already said the cure will be worse than the disease. Like chopping off the head of the guy to remove his brain tumor. The problems must be ascribed to those who have the problems. The old trick of spread the problem to others via contagion to save the ones in trouble is not working this time.